Ballmer hails Windows Mobile for Welfare™

Fancy iPhone screen not recession-friendly

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Steve Ballmer on Thursday said Microsoft's smartphone strategy for the recession is to be a soup kitchen for the mobile market.

That apparently means not adding premium features in Windows Mobile like support for a capacitive touch screen – something he claims would make phones too expensive for phone manufacturers to make.

"We want to provide vendors with the ability to make Windows phones up and down the price scale," Ballmer said to Business Week editor Steven Adler at the McGraw-Hill media conference. All Things Digital's Peter Kafka paraphrased the chat here.

Ballmer said that while touch technology is important for the mobile market, he downplayed the need for capacitive touchscreens, a technology embraced by the iPhone, webOS, and Android OS.

"Windows Mobile 6.4 has touch on it. The way Apple does touch drives costs," Ballmer said. "The way they do it on the iPhone is not an inexpensive component. We'll do it in a way that you can afford to do it on most phones."

Ballmer said the sweet spot for smartphones is between $150 and $200 to make. Retailing a phone for $500 isn't going to fly in every market, he said.

(But then since Microsoft only provides the software, why not offer phone makers the choice of including more expensive technology?)

The Microsoft potentate also took a shot at Apple's prices in general. "No one's going to pay $500 more for a logo," he told his (reportedly gasping) audience.

Touching on the upcoming Microsoft retail stores, Ballmer said the retail outlets will serve as a "showcase" for Microsoft products rather than a direct source of sales like Apple stores.

Ballmer also said Microsoft is still open to discussing a search partnership with Yahoo's new chief, Carol Bartz. But Redmond has been stalking the search firm for ages no matter how spurned. "I'm sure when it's appropriate, we'll have a chance to sit down a talk," Ballmer said. Basically, Yahoo is going to need to get a restraining order to stop Ballmer serenading at its windows every evening. ®